GREECE: A new draft on franchising has been issued in Greece.

Carlotta Mazzetti | GREECE | 2007-05-17

Carlotta Mazzetti

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The draft is composed of 9 articles that provide definitions of franchising, the field of application of the law, the form and contents of the contract, the pre-contractual conduct obligations of the franchisor, the disclosure obligation and the pre-post-contractual non-competition obligations.

A franchising contract is defined as an agreement between two independent legal subjects, through which the franchisor grants the franchisee the availability to use its package of intellectual or industrial property rights, while the franchisee, in becoming part of its franchising system, provides to distribute goods or services, in a specific geographical area.
The draft also distinguishes the franchising contract from the master franchising contract, although similarly regulated, and underlines the difference between Greek national and foreign franchisors.

The core of the draft seems to be represented by Article 4, which regulates the disclosure obligations of the franchisor, whether Greek or foreigner.
According to this provision, the franchisor should provide the prospective franchisee with a copy of the franchise agreement to be signed, at least fifteen days before its execution, together with selected annexes, such as: basic information about the franchisor (its commercial name, balance-sheet of the last three years, the management directory, the experience and the details of its employees), information about the franchisor’s trademark and commercial names currently used, a list of franchisee currently operating in the network, a description of any judicial or arbitral proceeding brought against the franchisor that ended with a partial or final judgment (or decision) in the previous three years.

It cannot be overseen that in several occasions the draft regulates matters with international public policy provisions (lois de police), although it was not necessary. Furthermore, some of the provisions are not in total accordance with the European competition law. If this draft finally takes the form of a Law, it is attended to cause several problems of accordance of the Greek Law at the European competition law and especially the provisions of anti-trust law.

The effort of regulating the franchising contract, which is one of the most important contracts of distribution law, should at least be rewarded. Yet, the draft ought to be reformed, not only just linguistically and morph-syntactically, but mostly in order to be modernized and to sufficiently cover the commercial expectations of the Greek market and the European market in accordance with Greek and Community Law.



Spyridoula Tsirou, IDI country expert for Greece.



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